This is the eleventh annual publication in this series. It has been preceded by the preliminary publication Business Operations and Industry Performance (cat.no.8142.0). Estimates from the 1995-96 to the 2000-01 Economic Activity 2000-01 Surveys (EAS) are presented in this publication. The estimates contain revisions to previously published estimates that have resulted from further analysis of the data and additional data supplied by providers.

Changes in this issue

The 2000-01 EAS excluded data from the Agriculture, forestry and fishing industry. This exclusion is temporary; it is planned to reintroduce this industry in 2002-03. For the purposes of this publication gross fixed capital formation (GFCF) has replaced total capital expenditure as the measure of industry investment. Refer to the glossary for further detail.

Future changes

In 2001-02 the Business Operations and Industry Performance(cat.no.8140.0),and Australian Industry (cat.no.8155.0), will be replaced by a new publication. The details of this publication are still being considered and details will be announced in the final issue of Australian Industry (cat.no.8155.0) which is due for release in February 2003.

User note

Refer to table 20 for the relative standard errors (RSE), as the RSEs for some industries are high. Any analysis should take the RSE into account as it can be used to calculate the level of confidence attached to the estimate.

For the purpose of the summary of findings, All industries excludes businesses in the Agriculture, forestry and fishing industry.

Operating businesses and employment

The total number of employing businesses operating in the Public trading and Private sectors of the Australian economy increased by 2% between 1999-2000 and 2000-01. In 2000-01, there were 610,893 operating businesses, 13,719 greater than in 1999-2000. Refer to paragraphs 6, 7, 8 and 24 of the Explanatory Notes for a detailed description of the business unit.

The number of operating large businesses rose by 21 (1%) to 3,229 continuing the steady increase over the past six years. Employment across All industries increased by 3% or 175,000 people between 1999-2000 and 2000-01. Of those employed at 30 June 2001, 2,436,000 (38%) were employed by large businesses and 3,944,000 (62%) were employed by other businesses. These proportions have remained almost the same between 1999-2000 and 2000-01, despite changes in the number of operating businesses and employment. A number of industries experienced an increase in employment from 1999-2000 to 2000-01.

The Accommodation, cafes and restaurants industry recorded the largest increase in percentage terms (11%) with the Property and business services industry registering the highest increase in the actual number of persons employed, 53,000 (5%). Decreases in employment were recorded in Personal and other services, Construction, Electricity, gas and water supply and Transport and storage industries, with the Personal and other services industry recording the largest decrease in percentage terms (8%) and the largest decrease in terms of the actual number of persons employed (15,000).

The Property and business services industry continued its steady growth (5%) (employing 1,059,000) after it overtook the Manufacturing industry in terms of the number of people employed in 1999-2000, Manufacturing now employs 946,000. However, the Retail trade industry remains the largest employer among all the industries in Australia (employing 1,096,000).

Operating income and expenses

Total operating income increased by $101,508m (8%) between 1999-2000 and 2000-01 to $1,373,130m. The operating income of large businesses increased by $54,874m (8%) while for other businesses it increased by $46,633m (8%). Apart from the Construction industry which registered a decrease of $10,767m (12%), all the other industries recorded an increase in operating income, with the largest percentage increase occurring in the Mining industry (30%).

Total operating expenses increased by $88,063m (8%) between 1999-2000 and 2000-01 to $1,252,284m. Among large businesses, operating expenses increased by $40,297m (7%), while for other businesses operating expenses increased by $47,768m (9%). Most industries recorded an increase in operating expenses, with the largest percentage increase occurring in the Property and business services and the Cultural and recreational services industries, both 20%. Decreases in operating expenses were recorded in the Construction and Finance and insurance industries (12% and 2% respectively).

In 1995-96, large businesses accounted for 52% of total operating income. In 2000-01 the percentage contribution of large businesses to total operating income was 54%. Similarly, the percentage contribution of large businesses to total operating expenses was 52% in 2000-01.

Operating profit before tax

Operating profit before tax (OPBT) in 2000-01 was $126,802m, an increase of $14,887m (13%) between 1999-2000 and 2000-01, the highest percentage increase in the last five years.

OPBT for large businesses increased to $87,739m, an increase of $15,976m (22%) between 1999-2000 and 2000-01. For Other businesses, OPBT fell by 3% from $40,152m in 1999-2000 to $39,063m in 2000-01, a fall of $1,089m.

In percentage terms, the largest increase in OPBT (95%) occurred in the Mining industry, followed by the Private community services (33%) and Finance and insurance industries (32%), while the largest decrease (24%) occurred in the Transport and storage industry. The large increase in OPBT in the Mining industry followed an increase of 11% in 1999-2000 and a decrease of 10% in 1997-98.

In 2000-01 the percentage contribution of large businesses to OPBT increased to 69% from 64% in 1999-2000. The contribution by other businesses fell from 36% in 1999-2000 to 31% in 2000-01. The Finance and insurance industry was the largest contributor, accounting for 35% of OPBT in 2000-01.

Total assets and liabilities

In 2000-01, total assets at the All industries level increased by 7%, while total liabilities increased by 5%. For large businesses, total assets increased by 5% and total liabilities increased by 4%, while for other businesses, total assets increased by 14% and total liabilities increased by 13%.

Most industries recorded an increase in total assets and total liabilities. The Communication industry experienced the greatest percentage increase in both total assets (22%) and total liabilities (32%). The Accommodation, cafes and restaurants industry was the only industry to experience a decrease in both total assets (9%) and total liabilities (11%) in 2000-01. The Electricity, gas and water supply industry also experienced a decrease in total assets (1%) in 2000-01. The Finance and insurance industry contributed 62% of the value of total assets and 69% of the value of total liabilities.

Gross fixed capital formation

Gross fixed capital formation (GFCF) fell by 1%, falling by $454m to $50,043m in 2000-01. GFCF for large businesses fell by 2%, while for other businesses GFCF increased by 3%.

At the industry level, the largest percentage increase (33%) was recorded in the Communication industry, where GFCF rose from $6,267m to $8,314m in 2000-01. Substantial increases in GFCF were also recorded in the Construction (30%) and Property and Business Services (29%) industries. The largest percentage decrease (62%) was recorded by the Finance and insurance industry.

Business averages

Average employment at the All industries level have remained the same over the last three years at 10.1 persons. However, other businesses show a marginal increase in their average employment, up from 6.2 persons to 6.3 persons. Average profit at the All industries level increased by 10%, due to a 21% increase in the average profit of large businesses and a decrease in the average profit for other businesses of 6%.

Business profitability

The proportion of all businesses making a profit fell by 3 percentage points in 2000-01 from 75.7% to 72.6%. The proportion of large businesses making a profit fell from 79.7% in 1998-99 to 74.1% in 2000-01 and the proportion of other businesses making a profit also fell from 75% in 1998-99 to 72.6% in 2000-01.

The industries which had the highest proportion of businesses making a profit in 2000-01 were Retail trade (79.7%), Personal and other services (77.4%), Communication services (75.8%) and Finance and insurance (75.4%).

The industries which had the highest proportion of businesses making a loss in 2000-01 were Mining (41.0%), Accommodation, cafes and restaurants (37.2%), Cultural and recreational services (31.0%), Wholesale trade (29.7%) and Manufacturing (29.0%).

Business comparisons

Looking at the quartile estimate of a particular performance indicator gives an indication of the distribution or variation in business performance for the indicator in a particular industry or in the economy as a whole.

In 2000-01, the industry with the largest profit margin at the highest quartile was the Finance and insurance industry (45.3%), followed by the Private community services industry (26.8%).

The industry with the largest return on assets at the highest quartile was the Private community services industry (124%), followed by the Personal and other services industry (100%), Accommodation, cafes and restaurants industry (66.3%) and the Construction industry (61.4%).

The industry with the largest return on net worth at the highest quartile was the Private community services industry (151.9%), followed by the Personal and other services industry (125.5%). Despite these two industries having such large percentage returns at the highest quartile, their returns on net worth were only 20.2% and 12.2% respectively.

Mining

The number of operating businesses in the Mining industry fell by 11% in 2000-01, continuing the steady decline over the past five years. The number of operating businesses in the industry is now 38% lower than the level recorded in 1995-96. However, employment in the industry recorded an increase of 6% to 69,000 reversing the decline which occurred in the industry over the previous four years (1995-96 to 1999-2000).

Total operating income increased substantially by 30% in 2000-01, following a decrease of 0.4% in 1999-2000. Similarly, total expenses registered an increase of 13% in 2000-01, following decreases of 1% and 2% in 1999-2000 and 1998-99 respectively. OPBT rose by 95% whilst GFCF fell by 9%.

The proportion of businesses in the industry making a profit fell to 55.4% in 2000-01, with an accompanying increase in the proportion of businesses making a loss to 41.0%.

Manufacturing

In 2000-01 the number of operating businesses in the Manufacturing industry increased by 2% to 47,454 businesses. The increase reversed the decline which has been observed between 1996-97 and 1999-2000. Employment in the Manufacturing industry on the other hand continued to decline. It fell by 1% in 2000-01, registering a fall of 6% between 1996-97 and 2000-01.

Total operating income increased by 5% in 2000-01, while total operating expenses increased by 6%. The increase in both indicators was consistent with that shown by both series over recent years. OPBT fell by 3% whilst GFCF increased by 2%.

The Manufacturing industry accounted for 19% of total operating income across all industries in 2000-01, the largest contributor of any industry.

The average employment and average profit for businesses in the Manufacturing industry fell in 2000-01, the first drop since 1996-97. Average employment fell from 20.5 persons in 1999-2000 to 19.9 persons in 2000-01. Average profit also fell by 5% in 2000-01 following an increase of 26% in 1999-2000.

Electricity, gas and water supply

The Electricity, gas and water supply industry experienced an increase of 3% in the number of operating businesses in 2000-01, but employment in the industry fell by 2%. The increase in the number of operating businesses continued the pattern of recent years, whilst employment has continued to decrease since 1996-97. The increase in the number of operating businesses and decrease in employment reduced the average employment in the industry by 4% to 176.7 persons in 2000-01 compared to 183.9 persons in 1999-2000, below the level recorded in 1995-96 of 266.6 persons.

Total operating income in the Electricity, gas and water supply industry increased by 4% in 2000-01 and total operating expenses increased by 6%. OPBT fell by 11% and GFCF also fell by 16%.

Construction

The number of operating businesses in the Construction industry increased by 3% in 2000-01. Employment however, fell by 2% in 2000-01, following an increase of 3% registered in 1999-2000.

Both total operating income and total operating expenses in the Construction industry fell by 12% and OPBT by 13%. GFCF increased by 30% and total assets by 1%

Wholesale trade

The economic indicators of number of operating businesses and employment experienced an increase of 2% and 1% respectively in the Wholesale trade industry in 2000-01. The upward movement in these indicators became evident in 1997-98. Since 1997-98, the number of operating businesses in the industry has increased by 9% and employment by 8%.

Total operating income in the Wholesale trade industry increased by 8% in 2000-01 and total operating expenses increased by 9%. The Wholesale trade industry contributed 17% of the overall estimate for total operating income (second only to the Manufacturing industry).

OPBT fell by 23% in the Wholesale trade industry in 2000-01, following increases of 37% and 7% in 1998-99 and 1999-2000 respectively. The proportion of businesses making a profit fell by 9%, the third consecutive decrease and is now at 68.7%, down from 75.4% in 1999-2000. Similarly, the proportion of businesses making a loss increased from 21.4% in 1999-2000 to 29.7% in 2000-01.

Retail trade

The number of operating businesses in the Retail trade industry remained relatively constant in 2000-01, while employment rose by 5%. This had the effect of raising average employment in the industry from 9.7 persons to 10.1 persons. The industry remains the largest employer in the Australian economy, employing 1,096,000 people, or 17% of the total employment across all industries.

Total operating income and total operating expenses increased in the industry in 2000-01, by 11% and 12% respectively. However, OPBT and average profit fell by 11% and 12% respectively.

The Retail trade industry recorded the highest proportion of businesses making a profit (79.7%) in 2000-01 across all industries. This compares to 77.8% in 1999-2000 81.0% in 1998-99 and a high of 86.1% in 1997-98.

Accommodation, cafes and restaurants

The number of businesses operating in the Accommodation, cafes and restaurants industry increased by 3% in 2000-01. Employment in the industry also increased by 11% following decreases of 4% and 7% registered in 1998-99 and 1999-2000 respectively. The average employment in the industry increased from 13.1 persons to 14.0 persons in 2000-01.

Decreases were recorded in OPBT (19%) and average profit (23%). Total assets and total liabilities also fell by 9% and 11% respectively in 2000-01. Similarly, GFCF in the industry fell by 35% in 2000-01, this followed an increase of 36% in 1999-2000.

The proportion of businesses making a profit fell by 24% in 2000-01, following an increase of 11% in 1999-2000. Similarly, the proportion of businesses making a loss increased substantially from 15.5% to 37.2% in 2000-01.

Transport and storage

Employment in the Transport and storage industry remained relatively static, with average employment in the industry also falling from 11.0 persons to 10.6 persons in 2000-01.

However, total operating income and total operating expenses rose by 7% and 9%respectively in 2000-01. OPBT fell by 23% and GFCF increased by 6%. The proportion of businesses making a loss in the industry increased marginally to 23.2% in 2000-01, up from 22.5% in 1999-2000.

Total assets and total liabilities rose by 7% and 6% respectively in 2000-01, compared to increases of 10% and 19% in both indicators in 1999-2000.

Care should be taken when comparing data for this industry over time as the estimates for this industry have been influenced by the privatisation of public transport services, mergers, takeovers and major restructuring. These influences have resulted in more units coming into scope of the EAS. Refer to paragraph 4 of the Explanatory notes for details of EAS scope and coverage. The Road transport industry includes businesses such as road freight transport operators, charter bus services, tramway passenger transport operators, hire car services, taxi cabs, school bus services and taxi truck hire.

Communication services

In 2000-01, the Communication services industry experienced a 5% increase in the number of operating businesses and a marginal increase in employment.Total operating income and total operating expenses in the industry in 2000-01, both increased by 5%. The industry also experienced substantial increases in total assets (22%) and total liabilities (32%). GFCF in the industry also increased by 33%, in 2000-01.

The proportion of business making a profit in the Communication services industry decreased from 84.7% in 1999-2000 to 75.8% in 2000-01. Similarly, the proportion of businesses making a loss increased in 2000-01, from 15.3% in 1999-2000 to 22.2% in 2000-01.

Finance and insurance

The Finance and insurance industry registered an increase of 7% in the number of operating businesses in 2000-01. The industry also registered a decrease of 62% in GFCF, in 2000-01.

An increase of 6% was registered in total operating income, however, total operating expenses registered a decrease of 2% resulting in a 32% increase in OPBT. Both total assets and total liabilities increased by 6% and 3% respectively.

Property and business services

The Property and business services industry recorded an increase of 3% in the number of operating businesses and an increase of 5% in employment in 2000-01. Total operating income increased by 18% and total operating expenses increased by 20%. OPBT increased by 7%. Refer to explanatory note 18 for further information.

The increases in total operating income and total operating expenses followed similar patterns from 1995-96 to 2000-01. Since 1995-96, total operating income in the industry has increased by 65%, total operating expenses by 72% and OPBT by 24%.

Private community services

The number of operating businesses in the Private community services industry increased by 2% in 2000-01. Employment in the industry also increased by 7% in 2000-01. Both total operating income and total operating expense increased by 17% and 15% leading to a 33% increase in OPBT.

Total assets and total liabilities in the industry increased by 9% and 11% respectively, but GFCF fell by 3%.

Cultural and recreational services

The number of operating businesses in the Cultural and recreational services industry rose by 3% in 2000-01. Employment also increased marginally. The increase in the number of operating businesses combined with the small increase in employment led to a fall in the average employment in the industry from 11.0 to 10.7 persons.

In 2000-01, total operating income and total operating expenses increased by 14% and 20% respectively. OPBT fell by 19% in the Cultural and recreational services industry in 2000-01, following substantial increases of 99%, 42% and 20%increases in 1997-98, 1998-99 and 1999-2000 respectively. Average profit in the industry fell by 21% in 2000-01 from $188,000 to $148,000.

The proportion of businesses making a profit in the Cultural and recreational services industry is now 65.4%, compared to 61.4% and 60.2% in 1998-99 and 1999-2000 respectively.

Personal and other services

The number of operating businesses in the Personal and other services industry registered a third consecutive decline in 2000-01. Employment in the industry also fell by 7% (15,000 persons). Average employment in the industry fell from 6.0 persons to 5.5 persons in 2000-01.

Total operating income in the industry increased by 6% ($823m) and total operating expenses increased by 7% ($954m). Total assets increased by 14% ($1,899m) in 2000-01, following a fall of 21% ($3,577m) in 1999-2000, while total liabilities rose by 13% ($706m) in 2000-01.

The proportion of businesses in the industry that made a profit in 2000-01 was 77.4%, an increase on the proportion of 73.5% recorded in 1999-2000. Similarly, the proportion of businesses that made a loss was 21.0%.

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